This is How Privacy-Preserving and Compliant Payments Can Work in Practice
Berlin, June 08, 2023.
Over the past few months, the team at etonec has worked hard to build a prototype for privacy-preserving and compliant payments via the Mina Protocol. We layed out the concept in a feasibility study co-authored by Hauck Aufhäuser Lampe, the Mina Foundation, and University of Luxembourg last year. While focusing on cryptocurrency payments, we brought this concept to life with our prototype! We are thrilled to launch a video today that shows how our privacy-preserving and compliant software solution built on Mina could look in practice.
How does it work?
We have developed a functional prototype that shows how we could enable privacy-preserving and regulatory compliant payments between two users. These payments are anonymous just like paying with cash today, but in a digital format. All the while ensuring compliance with basic anti-money laundering (AML) and know-your-customer (KYC) regulations. Our prototype shows how users in anonymous accounts, using a so-called “privacy pool”, can exchange small amounts of value anonymously within pre-assigned limits.
Anonymity is ensured by cryptographic zero-knowledge proofs; regulatory compliance is ensured by limits on anonymous payments and elements from self-sovereign identity. Technically, the solution was designed as a zkApp, using Mina Protocol's smart contracts powered by zero-knowledge proofs. We showed that with our prototype using Mina zkApps, users get privacy, business get compliance and developers get ZK programming with Typescript.
As announced a few weeks ago, we have been awarded a grant from the Mina Foundation to integrate the learnings from the functional prototype to build a state-of-the-art zero-knowledge proof solution (zkp-ID) with Know-Your-Customer (KYC) and Anti-Money Laundering (AML) functionality. This solution will be integrated within the Lumina DEX, a decentralized exchange (DEX) built on the Mina Protocol, to help satisfy regulatory needs without sacrificing user privacy. Lumina DEX will be one of the first DEXes that actually use zero-knowledge technology in this novel way.
If you are interested in learning more about it, please reach out to us.